Study of Competitiveness

- A Case Study of DHL

Ji Liu & Yuanyuan Wen

June 2012

Master’s Thesis in Business Administration

Department of Business and Economic Studies

Supervisor: Akmal Hyder

Examiner: Pär Vilhelmsson

Abstract

Title: Study of Competitiveness- A Case Study of DHL

Level: Final assignment for Master’s Degree in Business Administration

Author: Ji Liu & Yuanyuan Wen

Supervisor: Akmal Hyder

Date: 2012 May

Aim: This study deals with two research questions:

RQ1: What competitive advantages does DHL gain from external and internal factors?

RQ2: What competitive disadvantage does DHL have? And what DHL can learn from

analyzing competitive disadvantage?

Method: primary data for this research has been mainly collected through interviews.

Moreover, the official reports are used as secondary data to present the empirical situation of

DHL.

Conclusion: By concerning the external and internal factors of DHL, the SWOT analysis is

conducted. The strength of DHL is customer satisfaction, green programme etc; weakness is

price, liability insurance etc; opportunities are cooperation development, innovation etc; and

threats are tough competitors. The strength and opportunities are regarded as DHL’

competitive advantages, while the weakness and threats are DHL’s competitive disadvantage

that need to be fixed.

Further study & Implication: In this thesis there is no information to indicate if DHL has

any unmet needs, but it must be there. If DHL can meet unmet needs to customer, there is no

doubt DHL would be more competitive in the 3PL industry. It would be interesting to

investigate what unmet needs are there and how DHL can deal with it.

This study contributes to the companies which plan to develop their competition from inside

to outside in the market, especially in 3PL industry. This thesis gives authors deep insights

into company success factors and suggestions for dealing with the problems which company

may encounter.

Key words: competitive advantages, competitive disadvantages, external and internal

analysis, DHL, SWOT analysis

Table of Contents

1. Introduction ......................................................................................................................................... 1

1.1 Background ................................................................................................................................... 1

1.2 Purpose .......................................................................................................................................... 2

1.3 Research questions ........................................................................................................................ 2

1.4 Limitation ...................................................................................................................................... 2

1.5 Outline........................................................................................................................................... 2

2. Theoretical Framework ....................................................................................................................... 3

2.1 3PL Industry.................................................................................................................................. 3

2.2 External Analysis .......................................................................................................................... 4

2.2.1 Customer Analysis ................................................................................................................. 5

2.2.2 Competitor Analysis .............................................................................................................. 6

2.2.3 Environment Analysis ............................................................................................................ 7

2.3 Internal Analysis ........................................................................................................................... 8

2.3.1 Product quality ....................................................................................................................... 8

2.3.2 Brand associations............................................................................................................... 9

2.4 Service Marketing ....................................................................................................................... 10

2.5 SWOT analysis ........................................................................................................................... 10

3. Methodology ..................................................................................................................................... 12

3.1 Qualitative Method ..................................................................................................................... 12

3.2 Data collection ............................................................................................................................ 12

3.2.1 Primary data ......................................................................................................................... 12

3.2.2 Secondary data ..................................................................................................................... 13

3.3 How can conclusion be drawn .................................................................................................... 14

3.4 Validity ..................................................................................................................................... 15

3.5 Reliability .................................................................................................................................. 15

4. Empirical Findings ............................................................................................................................ 16

4.1 Introduction of DHL ................................................................................................................... 16

4.2 DHL Customer ............................................................................................................................ 16

-------- Dirk Klasen ....................................................................................................................... 18

4.3 DHL Competitor ......................................................................................................................... 18

4.4 DHL Environmental Effect ......................................................................................................... 20

4.5 DHL Quality of Service ........................................................................................................ 23

-------------- Dirk Klasen................................................................................................................ 23

-------------------- Dirk Klasen ........................................................................................................ 25

4.5.1 DHL Air Freight .................................................................................................................. 25

4.5.2 DHL Ocean Freight .............................................................................................................. 26

4.5.3 DHL Road & Rail Freight .................................................................................................... 26

4.6 DHL Brand Associations ............................................................................................................ 27

5. Analysis ............................................................................................................................................ 30

5.1 DHL customer analysis ............................................................................................................... 30

5.2 DHL competitor analysis ............................................................................................................ 31

5.3 DHL environment analysis ......................................................................................................... 32

5.4 DHL quality of service ................................................................................................................ 35

5.5 DHL brand association ............................................................................................................... 36

5.6 SWOT analysis for DHL ............................................................................................................ 38

6. Conclusion ........................................................................................................................................ 41

6.1 Implication .................................................................................................................................. 42

6.2 Further study ............................................................................................................................... 42

Reference .............................................................................................................................................. 43

Appendix ............................................................................................................................................... 47

Content of Figure and Table

Figure.1......................................................................................................................................8

Figure. 2.....................................................................................................................................9

Figure. 3...................................................................................................................................11

Figure. 4...................................................................................................................................14

Figure. 5...................................................................................................................................23

Figure. 6...................................................................................................................................24

Figure. 7...................................................................................................................................27

Figure. 8...................................................................................................................................28

Figure. 9...................................................................................................................................30

Figure. 10.................................................................................................................................33

Table. 1.....................................................................................................................................8

Table. 2...................................................................................................................................17

Table. 3....................................................................................................................................36.

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1. Introduction

In this section, a brief introduction of 3PL will be given in the beginning. Then the main

purpose of thesis is attached. Research questions are stated clearly, it gives a brief direction

of thesis. The limitation and outline are provided in the end of this section.

1.1 Background The leading companies devise and evaluate their marketing strategy to survive and keep up

with the rapid transformations in dynamic and competitive environment. Along with the

globalization and the development of technologies, more and more companies have realized

how complex the competitive situation is today. Increasingly, in order to respond to the

highly competitive environment, many companies have to look for an approach to develop

themselves from “inside” to “outside” (Ahmed & Rafiq, 2003), and it is essential for

multinational companies to focus on the differences among different countries in developing

marketing strategy. It is also very important to figure out what the key factors are to make a

company successful.

As a brand new industry, the main function of 3PL can provide and integrate operation,

warehousing and transportation services that can be scaled and customized based on customer

needs or market conditions. 3PL often satisfies the customers’ demand by delivering goods

and services in right time at required place. Basically, by the help of 3PL or effective logistics,

shippers get opportunity to maintain their commitments by delivering high quality and timely

services to customers. An excellent delivery service cannot only win the loyal customer but

also gain large profits that expand company’s business (Qureshi et al, 2007). An important

research can be carried out to investigate how marketing strategy can be developed to

improve such a growing industry.

This thesis focuses on a 3PL company-DHL mainly to examine what reasons or factors make

it one of the most successful logistics companies all over the world, and what competitive

advantage DHL can gain through external analysis and internal analysis of marketing strategy.

According to Aaker (2007), external analysis is an exercise in creative thinking from different

perspectives, such as competitor, customer, environment and etc. These perspectives can help

define the relevant industry. On the other hand internal analysis identifies brand association,

products quality and customer satisfaction of companies. In the end SWOT analysis would be

used to summarize the company’s strength, weakness, opportunity and threats. The purpose

and the research questions are presented below:

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1.2 Purpose

The aim of this thesis is to study what competitive advantage DHL can gain from external

and internal factors and what DHL can learn by analyzing the competitive advantage.

1.3 Research questions

The research questions of this thesis are:

RQ1: What competitive advantages does DHL gain from external and internal factors?

RQ2: What competitive disadvantage does DHL have? And what DHL can learn from

analyzing competitive disadvantage?

1.4 Limitation

Marketing strategy contains a lot of issues and therefore it is not possible for the authors to

identify all successful factors in this research. Instead, this thesis only presents a very limited

part of marketing strategy i. e. external and internal analysis to describe which can be the key

success factors to gain competitive advantage for DHL. It cannot represent or explain why

entire 3PL industry can grow so fast and become an emerging industry today. Besides, this

thesis focuses on DHL marketing department which means the authors only gathered

information from DHL Express Head of Marketing Communication and DHL’s site manager;

therefore it cannot reflect the comprehensive views and perspectives of other departments of

the company. And due to some questions are sensitive to DHL, authors could not get

complete information from the company officially.

1.5 Outline

The thesis consists of six parts. Section one gives the background of the external and internal

analysis of marketing strategy and purpose of the whole thesis. Section two deals with earlier

research and scientific articles. Regarding a number of factors, such as customer analysis,

competitor analysis, and quality of service, etc. Two frameworks which are used in this thesis

are summarized as well. Section three describes the main method that used for achieving the

purpose. Section four tells and describes what practical results we get during research.

Section five explains by linking to the literature what our results mean for answering research

problem. Section six deals with the conclusions and suggestions for future research.

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2. Theoretical Framework

In order to explain and describe 3PL, external & internal analysis, and service marketing,

many relevant theories and articles are mentioned in this section. It includes customer

analysis, environment analysis, brand association and service quality ect. In the end, SWOT

anaysis is explained as well.

According to Gerhardt (2002), a good image and reputation have postive effect for a

company. Competitor and customer are also play significant roles in the marketing. Aaker

(2001)’s theory emphasizes that customer and comeptitor can be classified into company’s

external analysis. Meanwhile, company reputation and product or service of company should

be classified into internal analysis.

In this section, a brief introduction of external and internal analysis is given and it would be

the main theory that can support carrying out the purpose of this work. According to Aaker

(2001) and Gerhardt (2002), external analysis can influence on business strategy if a

company adapted it in current dynamic competition. when customer and competitor are

researching and classifying by external and internal analysis, stronger strategies can be

developed to sustain a company’s growth. Thus, external and internal analysis is crucial

process for business. This analysis can help companies to understand themselves better and

deeper. Thereby the manager can use SWOT framework to analyze what strength, weakness

(internal factors) the company has and what opportunity, and threats (external factors) the

company faces. After that an appropriate market strategy can be developed and applied.

2.1 3PL Industry

According to the Council of Supply Chain Management Professionals, 3PL is defined as "a

firm provides multiple logistics services for use by customers. Preferably, these services are

integrated, or bundled together, by the provider. (Manzini et al, 2007).

“Outsourcing of logistics function is a business dynamics of growing importance all over the

world (Razzaque& Sheng,1998). A growing awareness that competitive advantage comes

from the delivery process as much as from the product has been instrumental in upgrading

logistics from its traditional backroom function to a strategic boardroom function”. The main

reason for outsourcing are: reduction in capital investment in equipment, facilities and human

resource, on-time delivery requirement. Third-party logistics (3PL) are widely popular in all

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over the world, particularly in Europe, and North America (Sahay & Mohan, 2006).

According to Rahman (2011), there are many users reducing in-house operations and using

3PL service providers instead. The level of satisfaction with 3PL service providers is high

and is reflected in a commitment to continue their use in the future. Thus, it predicts that the

use of 3PL services will continue to grow over the next several years.

According to Lieb (2008), ten years of research 3PL in the United States reveals a resilient

industry that has changed with user demands and an increasingly global economy. 3PL

relationships today have become more collaborative. It is a good news for big users of

logistics. “The relationships associated with 3PL are typically more complex than any

traditional logistics supplier relationships and they are truly strategic alliances. These

relationships have become a popular way to enhance an organization's flexibility in meeting

rapidly changing market conditions, focus on core competencies, and develop long-term

growth strategies” (Thakkar et al, 2005).

2.2 External Analysis

According to Aaker (2001), a successful external analysis should be directed and purposeful.

External analysis can affect strategy through providing optional strategic alternatives, and

even influencing final decision making among them, see Figure 1below:

Figure 1 The role of external analysis

Source: Aaker (2001), Chapter 2, p.20.

An external analysis can contribute to strategy indirectly by identifying: threats and

opportunities; strategic uncertainties that could affect strategy outcomes. “A threat such as

concern about the emergence of a new competitor, can dramatically affect the evaluation of

External

Analysis

Identification

Coustomer, competitor

& environment etc.

Threats/Opportunities

Analysis

Stretegic

decisions

Information

needed

Scenario

analysis

Strategic uncertainities

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strategy options. While a new technology, which can represent both a threat to an established

firm and an opportunity to a prospective competitor, can signal new business arenas.”(Aaker,

2001). And strategic uncertainties focus on specific unknown elements that will affect the

outcome of strategic decisions. One uncertainty might address technological improvements,

whereas another might consider the technological development and cost/benefit levels

achieved by competitive technologies.

In order to handle those uncertainties, there are three solutions: 1) the strategic decision, in

order to prevent delay in decision making which might cause costly and risky, it must be

determined immediately. 2) The information collection, it is necessary to gather all kinds of

information so that uncertainties could be reduced. 3) Scenario analysis, it is an alternative

approach or solution to manage possible uncertainties in the future. One of typical scenario

analysis is called “strategy-developing scenarios”, the object is to provide insights into future

competitive contexts, then use these insights to evaluate existing business strategies.

External analysis commences with customer and competitor analyses. Because customers do

not only help companies define the industries correctly, but also they are some kind of

original resource of relevant operational opportunities or threats (Aaker, 2001 & Gerhardt,

2002).

According to Aaker (2001), external analysis should consist of customer analysis, competitor

analysis, and environmental analysis.

2.2.1 Customer Analysis

Customer focus is an important element of market orientation. Generally, business producers

must consider their customer’ demand and put it firstly, prior so that the long term

relationship with customers could be made (Nwokah, 2009). Customer focus has already

been talked in many different ways, it is often relevant to market orientation and ‘customer be

first’ (Dolye & Wong, 1998). According to Aaker (2001) and Gerhardt (2002), customer

motivation, market segments and unmet needs are taken into account customer analysis

necessarily.

Segmentation identifies the target group which respond differently from other groups. The

advantage of segmentation strategy is: it can reduce the market space and create a dominant

position in the marketing. After identifying customer segments, the next phase is to consider

customer motivations (Aaker, 2001; Gerhardt, 2002). Generally, consumer motivation

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analysis consists of 1) identification of motivations, for example: car safety, people might be

asked why safety is important, and what is associated with a good or bad use experience? 2)

assess motivation importance, for example: mothers often selected snack food based on what

the child likes instead of qualities or nutrition; and 3) assign strategic roles to motivation,

which means the selection of motivations central to strategy will also depend on competitor’s

strategies. Unmet needs are the product or services that do not meet customer expectation,

and it means opportunities and threats for companies to improve the quality of their goods or

services.

2.2.2 Competitor Analysis

For business area, understanding competitors has been recognized as a significant point of

market activities as well as customer analysis (Wright et al, 2002). Usually, competitor

analysis starts with identification of current and potential competitors, however the potential

competitors are invisible and difficult to identify. There are two major ways to handle it. The

first one is observation of customers who might change another brand or make choices

among competitors, while the second way is classification of competitors and place them into

strategic group based on their competitive strategy (Aaker, 2001 & Gerhardt, 2002).

Then the next step is to understand competitors and their strategies. “It is important to

evaluate the competition on a regular basis. Identifying who it is that you compete with, who

is the most and least intense can give strength in developing a marketing strategy. Marketing

strategists should evaluate who are the makers of substitute products, and who potentially

could become competitive entrants” (Gerhardt, 2002). Accordingly, there are several

elements which affect competitor actions. For instance, they are 1) size, growth and

profitability 2) objectives and commitment 3) image and positioning strategy 4) current and

past strategies 5) cost 6) organization and culture, 7) strength and weakness. Indirectly, these

elements could be studied effectively by identifying and placing competitors in strategic

groupings. Groupings may include similar competitive strategies, distribution channel,

communication strategies, price, position, and competencies, including brand associations,

logistics, capability, or research and development (Gerhardt, 2002).

In order to understand competitors, the further research and data collection are essential.

Aaker (2001) states that competitor’s official Web site is a rich and reliable source where

people can get brief information about the competitor. However the more detailed

information is not easy to obtain, so the private contact or market research are needed.

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2.2.3 Environment Analysis

According to Salih (2003), the efficient use of stock of natural resource should be concerned,

and as people know the natural resource is a gift from nature. “In many countries,

environmental depletion and resource degradation may go too far by violating economic

principles. Therefore, to maintain sustainable development, the quality of the environment in

these countries should be maintained; improvements are encouraged and further degradation

should be managed. The importance of natural assets suggests that unmanaged degradation

and negative changes in natural assets are not welcomed and may in fact violate economic

principles” Salih (2003). Furthermore, if the natural resource could be managed and

improved appropriately, the future generation can get benefits due to sustainable

environmental resource management.

Sustainable development was defined as development which meets the needs of present

without compromising the ability of future generations to meet their own needs (WCED,

1987). Accordingly, sustainable development can provide the needed guide for adopting

relevant policy. For instance, adding the proviso of sustainability to the goal of development

requires the maintenance of investment in natural, ecological and physical capital. And it also

requires the integration of political, economic and ecological factors into the process of

decision making. Thus, as Pearce et al (1990) state that sustainable development can be

treated as a vector of social objectives and goals that does not decrease through the time.

Now, the biggest ecological crisis human have to face is unsustainable use of space and time

(Reisch, 2001). Furthermore, the modern society and its economic system create the

disruption in the natural fabric of time and space (Jordan & Fortin, 2002).

There are 39 CEOs of 3PL companies involved Lieb & Lieb (2010)’s survey to estimate and

rank the most significant short term sustainability challenges which the companies faced in

2008. The results are summarized in Table 1.

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Table 1Most important short-term sustainability challenges faced by 3PL

Source: Environmental sustainability in the third-party logistics (3PL) industry, Lieb & Lieb, 2010.

In this thesis these challenges would be analyzed for DHL as well.

Furthermore, Koh (2005) points out the development of 3PL could leave influence on

environment. With the advent of the boom in the Chinese 3PL industry, both foreign and

domestic 3PL providers came and tried to capture the huge market. The economic

compensation is keeping growing, however, the pollution is getting worse.

2.3 Internal Analysis

Internal analysis will help the companies identify if the existing strategy is suitable, or if there

is any need to adjust it. Certainly internal analysis address companies performance, such as

brand association,and products quality (Aaker, 2001).

2.3.1 Product quality

A product or service should be compared with the competitor and customer expectation as

well. The quality has been an important feature fro market success. The reason why Japanese

companies can be so successful is the quality of their products is very high, and always meets

customer’s expectation (Bergman & Klefsjö, 2010). Actually there is no way to evaluate how

9

well a product or service works unless it is used (Shapiro, 1982). Somehow, there are some

ways by which product or service can be evaluated through specific characteristics. For

example, the quality of bus or train might be concerned with departure or arrival time.

Further, there are several dimensions involving product and service quality concepts (see

Figure 2).

Figure 2 Quality dimensions of goods & service.

Source： Quality from customer needs to customer satisfaction, Bergman & Klefsjö，2010. pp. 30-35.

Safety and environmental impact address that the products should not cause personal injury

or leave bad influence to environment, thus the protection strategy should be attached against

those damages. Durability means how the goods can be used and delivered without any

damage. While the credibility concerns if there is ability to trust supplier. Access concerns

how easy it is to come into contact with the supplier. Reliability refers to the consistency of

performance. Communication with customer in an understandable way. Responsiveness

means willingness to help the customer (Bergman & Klefsjö, 2010).

2.3.2 Brand associations

Brand association is judged by customers who have relative experience with past products or

services. A good association might make contribution to the reputation of a company

(Shapiro, 1982). Image of a company can be estimated. The simplest way is structured survey

by regularly asking customers to tell their use experience and how much a brand means to

them. By following this way the company could know more about its performance of

Quality

Reliability

Durabilit

y

Access

Safety Communication

Credibility Environmental

impact

Responsiveness

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products or services from customer perspective， so that it would get opportunity to improve

its performance. However, brand association is not only about external environment, i, g, the

impression of customers or image of brand; but also about internal environment-the

perspective of employees and the size of company (Nadin & Williams, 2012).

2.4 Service Marketing

Service marketing can be separated into two main areas of goods marketing and services

marketing in general. Service marketing typically refers to both business to consumer (B2C)

and business to business (B2B) services, and it usually includes marketing of services such as

telecommunications services, financial services, hospitality services and the like (Kolter et al,

2010). Services are economic activities offered by one party to another; however the

company provides service does not have the ownership of any physical things involved

(Lovelock & Wirtz, 2011).

According to Berry & Parasuraman (1991), there are three drivers for sustainable success

when company runs business performance. Thery are: control of destiny, trust based

relationship, and the success of employees. Each of three drivers explains the unique

principle to contribute to success of Service Company, for example: control of destiny means

that company should concentrate on customer consistently; trust based relationship asks

company to keep tight with its close customers instead of looking for new ones; the success

of employees provide the result that is relative to employee, customer success is a function of

employee sense of success. On the other hand, Grönroos (2000) derived six rules of service;

1.The “service mindedness” of employees.2 Demand/capacity assessment involving the

knowledge of the front line staff. 3. Flexibility in customer/supplier interactions as a function

of quality control. 4. Marketing and the role of the “part-time marketer”. 5. New technology

diffusion, efficiency and customer perceptions of value. 6. Guidance support and

encouragement of senior management. He emphasized the leadership of senior management

is the most important.

2.5 SWOT analysis

Traditionally, SWOT framework is used due to its inherent assumption that managers can

plan the strategy of company’s resource with its environment (Novicevic et al, 2004), SWOT

analysis is very simple and flexible which means it only requires people to understand the

nature of the company or the industry it operates instead of specific technical skills or

training. According to Mehta (2000), the benefits of SWOT analysis are :1) It can improve

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the quality of a company’s strategic planning even it lacks marketing information systems. 2)

Ideally, it helps marketing manager integrate all kinds of information efficiently. 3) It allows

collaboration between managers in different functional areas. Accordingly, the top manager

who has right to make decision must make sure if the objective of company or project is

attainable and available by using SWOT analysis. If the consequence is negative, another

objective will be proposed to replace the former one.

Figure 3 SWOT matrix

Source: Dual-perspective SWOT: synthesis of marketing intelligence and planning, Novicevic et al, 2004.

In addition, the standard SWOT matrix (see Figure 3) is a classic method to evaluate the

internal factors of company such as strength and weakness, while taking consideration into

opportunity and threats these are external to a company to determine its impact on company’s

marketing effort (Mehta, 2000). Novicevic (2004) also state that SWOT has been used as a

managerial tool for marketing planning, meanwhile the main functional approach of it is to

determine the internal and external elements.

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3. Methodology

In this thesis, the literature review and empirical work on DHL are carried out. In the

theoretical framework part, the valuable theories and literature regarding external and internal

analysis are found to fulfil the purpose of the thesis work. On the other hand, the empirical

data collection is mainly based on interview. Furthermore, the company report and official

website are regarded as additional sources to gather more information. Overall, analysis of

information from empirical interviews and literature are used to answer the research

questions.

3.1 Qualitative Method

This study descirbes marketing strategy of a logistic company. The aim of this thesis is

neither to formulate hypothesis from the conceptual work nor to test developed hypothesis by

generating the necessary data, the qualitative method is mainly used to describe and analysis

qualities, attributes and make distinctions (Punch, 2005). Generally, qualitative method

addresses the explanation of non-numerical data. There are several methods can be adapted to

collect qualitative information, for instance, structured interview, reflexive journals, analysis

of documents and materials and the like (Walliman, 2005). The qualitative method is used as

the research method in this thesis to discuss competitive advantage of DHL.

3.2 Data collection

An important basis for successful research is information in the form of facts. These facts can

be called data and are the ones that allow the researcher to understand the problem under that

is being investigated (Walliman, 2005). In order to conduct a relevant research both primary

and secondary data were gathered. Secondary data was obtained from scientific articles,

relevant books and Internet sources.

3.2.1 Primary data

Primary data is information that has not previously been published or collected. Walliman

(2001) addressed that “primary data, that is data observed, experienced or recorded closet to

the event, are the nearest one can get to the truth, distortions inevitably occur as the proximity

to the event decreases.” The data would be much more reliable by directly collecting by the

researcher.

The primary data was obtained in the form of the answers to a list of questions from the Head

of Marketing Communication of DHL Express in Stockholm, Sara Arrhenius. The purpose of

conducting this interview was to collect the practical information on the marketing strategy of

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DHL. There were 25 questions covering the wide range of DHL practices: DHL’s customer,

DHL’s competitor, DHL environmental strategy, DHL brand association, and DHL quality of

service (see Appendix). However, Sara was out of her office for business, it was impossible

to have the interview in person. So the contact and answering questions by Sara were

conducted via e-mail. Questions on customer and competitor are a little sensitive for DHL. It

was not available to publish this information. Therefore the question was sent to DHL head

quarter in Bonn by Sara for getting an approval. Unfortunately, after 11 times e-mail contact

with Sara, she had not got approval from her supervisor. She only picked some questions to

answer in the end, such as DHL environmental issues, DHL service and DHL brand

association. Regarding DHL’s customer and competitor, she just gave a few sentences to

describe them briefly (see Appendix).

In order to obtain more information, authors tried to contact with Site Manager of DHL

Freight in Gävle, Malin Stockberg. But the result of the interview was negative. Malin was

having meetings when authors went to her office twice. Therefore, no interview with was

taken place. Instead, Malin accepted questions via e-mail and looked through it. Finally, she

recommended authors to go to DHL official website to look for information. These

information was also carefully examined in order to get the general perspective of the

company. Regarding competitor question, Sara was reluctant to give relevant information.

Therefore authors had to search and use information from another logistics company, in order

to make a comparison with DHL.

Authors also asked DHL head quarter in Germany for help. This time Dirk Klasen who is

charge of regulation issue and outlets replied us, finally. He accepted questionnaire via

internet immediately and chose some of questions to answer. Besides, authors also contacted

Yunfeng Gao, Strategic Manager, who has been working for DHL in China for one year. The

interview was accomplished via Skype, it lasted about 50 minutes.

Overall, the questionnaire was answered through the support from Sara Arrhenius, Dirk

Klasen and Yunfeng Gao. DHL official website also makes a contribution to accomplish this

thesis. Unfortunately, some questions are still empty due to no information is available from

respondents or online.

3.2.2 Secondary data

Contrast to primary data, secondary data is that have been collected or published previously.

This type of data is the most common type encountered since it consists all types of written

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materials such as: magazines, books and internet. The DHL official website have been the

valued secondary source to replenish DHL brand association. In addition, by reading through

DHL transportation introduction (such as DHL air freight service, DHL road & rail service,

and DHL ocean freight service), the quality of DHL’s service can be analyzed. In terms of

environmental issue, DHL Supply Chain GOGREEN 2011 report helps authors gather DHL

environmental information. In order to get DHL competitors’ information, the authors also

use some useful information from UPS offical website and FedEx official website.

3.3 How can conclusion be drawn

Firstly, the external analysis and internal analysis are used. By concerning the empirical

findings about DHL, external factors (customer, competitor, and environment) and internal

factors (quality of product, and brand association)are intergrated into SWOT matrix.

Secondly, by SWOT analysis, the strength, opportunities, threats and weakness of DHL are

figured out. Thirdly, the strength and opportunities are regarded as company’s competitive

advantages; and weakness and threats are discussed as competitive disadvantages. Finally,

the conclusion is outlined.

Figure 4 How can conclusion be drawn

Source from authors own

External analysis ( customer, competitor, environment)

internal analysis ( quality of proudct, brand association)

SWOT analysis

conclusion (competitive advantages & competitive disadvantages)

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3.4 Validity

According to Hyder & Abraha (2003), there are four ways that can be used to measure the

quality of a research project: 1) construct validity; 2) internal validity; 3) external validity and;

4) reliability. Construct validity refers to correct operational measures for the concepts being

studied. This thesis does not focus on concepts being studied before, instead, it tries to figure

out why DHL can be such success. In terms of internal validity, it is significant in this thesis,

because internal validity is to seek answer for the question. Thus it is suitable for the main

purpose of this thesis, i, e, authors argue what competitive advantage DHL can gain by

considering external and internal factors. External validity means establishing the domain to

which a study’s findings can be generalized. However, the scope of external validity of this

thesis is rather limited. Because the industry the thesis focus on has been developing for years,

there is no more time or space to discuss more issues or make a deeper research.

All the data and theories authors got are from published books and journal, and the interview

with DHL manager also provide many useful information to this thesis project. And in order

to increase the validity of this thesis, the authors also have developed an appropriate

conceptual framework, composed of clear, well-developed concepts. The concepts which are

chosen and are used in compliance to the research problem and the purpose this thesis intends

to achieve. Therefore those data or information and concepts are confirmed to be valid.

Besides, in order to be sure, data was been checked carefully by the authors before they are

used.

3.5 Reliability

In Hyder & Abraha (2003)’s research, reliability is demonstrating that the operations of a

study, it means the data collection procedures can be repeated, the results is without any

change. The main theory and method exploited in this thesis all come from published books

and journals. They have been approved and adapted in different industries for a long period

of time, and all of them are proved by effective and valid results. Particularly the SWOT

analysis, was been used throughout many industries all over the world, thus authors are able

to confirm the research is reliable.

16

4. Empirical Findings

In this section, the results of interview and secondary information (See Appendix) are

presented. The empirical findings go from external perspective to internal perspective. First

of all, a brief introduction of DHL is given. Then the anwsers to interview that related to

customer, competitor, service quality ect are completed and listed by three interviewers.

4.1 Introduction of DHL

DHL is one of the largest 3PL company in the word founded by Adrian Dalsey, Larry

Hillblom and Robert Lynn in San Francisco in 1969，and DHL is a part of the Deutsche Post

DHL group. According to Dirk, DHL is made of DHL Express, DHL Global Forwarding,

DHL Suplly chain and DHL Mails. Since 1969, DHL employees were more than 285,000

people and provides its service in 220 countries all over the world. For its contributions in

past 40 years, DHL has become the global leader of the International express and logistics

industry.

Depending on its deep understanding of global Internet and local market, DHL provides

professional services in express, air freight and ocean shipping, ground transportation and

international postal service areas, etc. In addition, supply chain and enterprise information

solution are two important business issues which DHL deals with in connection to contract

logistics and enterprise solution services.

According to the growing British network shopping market, DHL Mail launched a new cross-

border service for American electronic retailers and mail-order companies— Track UK. As a

personal parcel delivery service, Track UK offers customers a cheap, speedy, mail-tracking

and customer-oriented service which fulfils the needs of American companies. Along with

this service, DHL finds another way to help customers to expand their international business.

Nowadays, more than 32 countries’ mail-tracking service is established in DHL (DHL

official website).

According to Dirk, DHL’s recent task is to focus on developing Asian market. DHL has built

six distribution centers in Hong Kong, Singarpore, Bangkok, Soul, Sydney and Toykyo.

4.2 DHL Customer

“Our top customers also need the flexibility to pick and choose from a wide range of supply

chain options……..We listen closely to our customers and work with them to provide high

quality solutions. Our customers' success is our success.”

17

----------- Sara Arrhenius

DHL has customers cover all over the world according to Sara Arrhenius. DHL accept any

kinds of delivery requirements no matter who the clients are.

According to Yunfeng Gao, DHL in order to know customer life cycle deeply, DHL

segments its customer into different groups. According to different customer needs,

customers are segmented as: strategic customer; long-term relationship customer; and normal

customer. Strategic customer is someone who has large amounts of logistics needs or

complex supply chain requires. Usually strategic customer group is made up of top 250

customers in the world. Long-term relationship customer is someone who asks DHL to serve

for them regularly and frequently, but their logistics needs are simpler than strategic customer.

In terms of normal customer, they are not loyal which means they can choose another 3PL

company if they like. In general understanding, DHL always provide best technology and

service to strategic customer to build strong cooperation relationship with them. However, the

main task for DHL is to focus on long-term relationship customer, in order to achieve profit

maximization. And DHL can do something for normal customer to turn them into loyal

customer.

DHL measures customer satisfaction in different ways， and sometimes it even differs

between regions and countries. For example: DHL Express in Sweden has processes, i, g,

Key Performance Indicators (KPIs) to measure customer satisfaction (for instance, measuring

how fast DHL pick up the phone, first time resolution of customer query), and it can also

handle customer complaints. The compalints should be dealt with within a specified

timeframe and resolved according to agreed timings. According to Sara Arrhenius and DHL

official website, in 2011 DHL Express won customer service award for the best B2B

customer service in Sweden. However, DHL does not provide more detail about customer

satisfaction.

DHL develops strong customer relationships to understand and know customer views. By

good understanding of customer, the company can adapt the specific service to fulfill

customer needs. Usually, DHL plays the role of a dependable partner when customer needs

them. The company always finishes their service optimally due to its excellent personal

approach. For instance, according to Dirk, the customs experts of DHL see to it that

customers’ goods get to their final destination with maximum reliability. Consequently, DHL

18

generates the trust and expectation to their customer. In addition, the Global Customer

Solutions which is launched for top 100 customers also make a great contribution to company

and customer to create win-win situation. Thus, the customer’s success is DHL’s success, is

put into practice.

“Attracting new customer is important, however, DHL still focuses on old customers’ need to

prevent losing those customers.”

------- Yunfeng Gao

“Customs clearance and associated services need to be fully understood – and that’s what we

do.”

-------- Dirk Klasen

4.3 DHL Competitor

According to Sara Arrhenius, the main competitors are UPS and FedEx. Dirk Klasen

considers TNT is another significant competitor. Thus, the comparison among these four

companies is made (see Table 2). By considering the features of logistics industry, several

significant issues are picked up to make a comparison, such as: safety & insurance, service of

company, environmental policy and company structure.

Size/No of

employees

Position Safety/

Insurance

Service/

Logistics

Environmental

policy/

Sustainable

strategy

Organization/

Company

structure

DHL International

large logistics

company with

285,000

employees in

220 countries

No. 1 in

logistics

industry

Customs-

Trade

Partnership

Against

Terrorism

(C-TPAT); a

growing

network of

highly

secured

locations

worldwide;

satellite

networks;

GPS

Shipping;

tracking;

export &

import

service;

freight and

etc.

DHL

GOGREEN;

DHL in-house

Carbon

Management;

environmental

management

system (EMS)

and etc.

DHL Express

DHL Global

Forwarding

DHL Supply

chain

DHL Mails

UPS International

large logistics

company with

426,000

a leading

global

freight

provider

Auto

Liability

Insurance;

property

Shipping;

tracking;

critical

freight; LCL

Carbon impact

analysis; package

design and test

lab;

U.S. Domestic

Package

International

Package

19

employees in

more than

200 countries

with

access to

almost

any kind

of

aircraft

or

vehicle

around

the world

insurance;

cargo

insurance

and etc.

and etc. transportation

management

Supply chain &

Freight

FedEx International

large logistics

company with

80,000

employees in

220 countries

A

younger

logistics

company

Auto

Liability

Insurance;

property

insurance;

cargo

insurance

and etc.

Package,

envelope or

freight

express;

freight

shipment;

provide

special

supplies etc.

Earth Smart

Solutions; Earth

Smart @ Work;

Earth Smart

Outreach

FedEx Express

FedEx Ground

FedEx Freight

FedEx Custom

Critical

TNT TNT Express

employs over

75,000 people

in 200

coutries

the

world's

leading

business

to

business

express

delivery

company

Claim

programme;

'Managing

Safely'

training

programme

Time critical

service;

special

handling etc.

PlanetMe

Programme

TNT Express

Table 2 the comparison between DHL, UPS, FedEx and TNT

Source: DHL offical website, UPS official website, FedEx official website and TNT official website.

According to DHL official website and Sara, DHL was founded in 1969, DHL has gained

No.1 in the industry. UPS was founded in 1907, nowadays UPS has been a leading global

freight provider with access to almost any kind of aircraft or vehicle around the world. FedEx

was founded in 1971. Regarding the size and employee, UPS has more employees than DHL

and FedEx, but the service region is almost same, which means around 220 countries. TNT

Express employs over 75,000 people, TNT operates 26,000 road vehicles and 47 jet freighter

aircraft. Its worldwide network has over 2,300 company owned depots in 200 countries

According to UPS official website and FedEx official website, both companies provide

different kinds of verification of insurance policy. The risk management department of UPS

can provide auto liability insurance for its customer and others. FedEx can also offer similar

service. However, there is neither information online to show if DHL has similar service nor

20

Sara mention about it. Instead, Dirk Klasen still proud of the ability of DHL to deliver what

customers claim to do in time. TNT is willing to accept claim request when accident happens.

Regarding service, these four companies provide similar service to customer. For instance,

their main tasks are to deliver goods and mails via air, sea or land to another place as

customer requirement. UPS Critical freight consists of multiple transportation modes: air,

surface, charter, and hand carry; advanced tracking accessible via the internet; specialized

equipment and value added services. FedEx offers a variety of shipping supplies including an

assortment of corrugated box sizes, padded envelopes, plastic bubble wrap, mailing tubes,

packing tape and more. Especially for high-tech items, such as cell phones, laptops and MP3

players, FedEx offers a specially designed and cushioned FedEx Laptop Box and Small

Electronics Box. DHL can use different high-techs to track goods and mails. TNT is good at

managing special handling, for example: TNT tranported two pandas half way around the

world.

Meanwhile, DHL implement GOGREEN program to measure environment impact; FedEx

develops Earth Smart Solution to improve all FedEx product, service or physical asset,

including planes, trucks and facilities to demonstrate clear and tangible benefits, not only to

FedEx’s business, but also to the environment, customers, team members (source: FedEx

official website, sustainability goals). UPS uses Carbon impact analysis, package design to

deal with environment problem. TNT announces the deployment of Hangzhou's first fully-

electric delivery fleet. This is TNT's second fleet of zero-emission electric delivery vehicles

implemented in China after its pioneering launch in Shanghai last September (source: TNT

official website). As the international leading 3PL companies, DHL, UPS, and FedEx work

through subsidiaries. Besides, each subsidiary is divided for a specific job For instance,

according to Sara Arrhenius, DHL Express only handles express shipments; DHL Global

Forwarding handles air and sea freight; DHL Freight handles land based transports.

According to Yunfeng Gao, the quality of DHL service in Asia, West Europe is very good.

Customers like staff’s attitude. But in South America and U.S, it is not as good as UPS or

FedEx.

4.4 DHL Environmental Effect

“Climate change is the most pressing challenge facing humanity. As part of the world’s

leading logistics group, Deutsche Post DHL, we are committed to taking corporate

21

responsibility for the environment seriously. Our GOGREEN program consolidates this

approach; ensuring sustainability is at the heart of everything we do.”

------DHL Supply Chain GOGREEN 2011

DHL and its subcontracted fleets, and various types of buildings have a number of

environmental impacts, especially the emission of CO2. That is why DHL is committed to

improving its carbon efficiency.

GOGREEN is part of DHL’s corporate strategy. Environmental protection program is crucial

to any large company’s strategic goals which makes a positive contribution to the world.

Besides it also offers customers innovative, sustainable solutions for DHL. GOGREEN sets

the stage for environmental management system, covering the local management aspects such

as water, waste, noise, the use of natural resources and local air pollution. GOGREEN is a

carbon-neutral shipping option for customers of DHL and Deutsche Post, and now available

for DHL Express customers in more than 35 countries. In general, business customers can

choose to send all or a selection of their international express shipments as GOGREEN. With

the GOGREEN optional service, all transport-related emissions of carbon dioxide are first

calculated and then offset through external climate protection projects.The brief objectives of

GOGREEN are:

to achieve transparency of environmental impact, with a focus on The company’s

carbon footprint including subcontracted transportation

to improve operational efficiency and minimize environmental impact

to generate value in offering green solutions to customers and helping them to achieve

their environmental goals

to demonstrate leadership in fostering green technologies, helping to shape political

regulations and engaging with the company’s key stakeholders

to mobilize employees in strengthening their environmental knowledge and helping

them to engage in environmental protection.

The DHL in-house Carbon Management team is responsible for managing and calculating the

carbon credits generated from climate protection projects. For a record, all GOGREEN

processes and the emissions-calculation methodology are verified annually by a third-party

verifier to guarantee the veracity.

22

As industry leader and the first 3PL company to establish carbon efficient target, DHL is

keeps promises wording on achieving its target and remaining at the forefront of relevant

technology and innovation. With the aim of a 10% efficiency increase by 2012, growing to

30% by 2020 in every business area, including those delivered by subcontractors, is

compelled to realise its goals.

DHL Supply Chain GOGREEN 2011 indicates that collaboration with leading automotive

manufacturers has achieved great progress, particularly for fuel savings. Research and

evaluation of alternative fuels, including hybrid and electric vehicles have been established as

well as advanced driver training. In a word, DHL is trying to increase efficiency in every

single area, including lighting, heating and cooling system throughout global estate. Through

DHL’s GOGREEN program, networks, fleet (driver behaviour included) and energy

efficiency improvement in buildings are three main drivers that have ability to influence

carbon efficiency.

“Due to the nature of our core businesses – mail and logistics – our environmental

management efforts focus on our industry’s most pressing issue: Carbon emissions resulting

from the combustion of fossil fuels to operate our fleet of aircraft and road vehicles, and from

the generation of heat, cooling and electricity used in our facilities. However, we recognize

that our operations have other impacts on the environment. These are also covered by our

GOGREEN program, which aims to minimize the impact of our business on the

environment.”

-----DHL official website-managing non-carbon aspects

DHL has implemented environmental management systems (EMS) to manage its

environmental impact more efficiently, according to Dirk. Especially in non-carbon

environmental impacts, DHL focuses on wood and water for paper production as most

important use of natural resources. In addition, air pollution, waste, noise, water pollution are

significant that DHL cannot ignore. The electric and other alternative vehicles DHL are

testing to improve its fleet’s CO2 efficiency in order to decrease the use of fossil fuels and

minimize environmental pollution; spill preparedness and response plans are key tools to

safeguard against any accidental release of water contaminants. DHL also provides education

to its employees to increase their awareness of natural assets. Mobilizing DHL employees is

an important approach in improving its resource efficiency and providing green solutions to

23

its customers. DHL employees are raising their awareness so that they put environmental

goals into practice, every day, around the globe.

“Sustainability is closely linked with our business strategy as it drives innovation, opens up

business opportunities and gives us a competitive advantage in the market. Our customers

are increasingly asking for green solutions, and for options to minimize the environmental

impact of their logistics. With our green solutions, we support our customers in achieving

their environmental targets.”

-------Sara Arrhenius

DHL customers already benefit from the GOGREEN program with the target to improve the

carbon efficiency of DHL by 30 % by 2020. However, DHL continuously strive to improve

CO2 efficiency in its own networks and operations.

4.5 DHL Quality of Service

“Our presence in all European countries means that we speak the local language and are up-

to-date with national customs regulations which, despite the EU, vary from country to

country.”

-------------- Dirk Klasen

As the world’s biggest logistics company, the main service of DHL is to deliver goods or

mails all over the world. According to Dirk, the DHL staff can speak local language to ensure

the communication between customer and them is easy. In each of European countries DHL

Freight has a terminal in business centres to ensure the convenience and efficiency of

transportation (see Figure 5). The main transportations are through air, ocean, road and rail.

With the extensive range of delivery service, DHL is able to satisfy all kinds of requirements

and needs by linking professional experts’ idea and latest technology, while it brings benefits

to its customer as well (see Figure 6). Addtional, the DHL staffs are very patient when they

talk with customer. For example, Sara Arrhenius, our interviewee who is very kind to accept

our interview. Even though she was busy, she answered our questions with comfortable

attitude every single time.

Moreover, Dirk believes that DHL would be the prior choice due to high quality service. Dirk

provides a few of examples that what benefits DHL can be brought to customer:

24

1) Professional advice on all matters pertaining to customs, import VAT (value-added

tax), excise duties and security via DHL consultancy services;

2) Full transparency of your flow of goods;

3) Bonded warehouses for easier import, export and transit operations and etc.

Figure 5 DHL Freight subsidiaries

Source: DHL road & rail service.

Figure 6 DHL transport solution for every need

Source: DHL road & rail service.

According to Yunfeng Gao, there are six factors can infulence DHL service: 1) indvidual

skills and knowledge; 2) system of organization; 3) equipments; 4) technological process; 5)

measurement and testing; and 6) working condition. So far, DHL has tried its best to ensure

25

any little detail wok well by concerning these six factors. However, the situation may be

diifferent in another place. It also depends on different region and differet place.

By deploying proactive solution DHL enables more flexible and faster response to dynamic

marketing and finish a specific requirement to customer. Regarding automotive business

demand, DHL has controlled every single component, such as shorter delivery times, low

cost, supply chain process and transportation improvement. As a result, DHL ensure other

companies to work with their suppliers and customers closely.

“The increasing Eastern European markets have to be covered – as well as many other

places. With over 200 offices through-out Europe, we ensure smooth customs clearance for

customer shipments, throughout the entire transport chain.”

-------------------- Dirk Klasen

However, according to Yunfeng Gao, DHL is more expensive than other 3PL companies. The

main reasons are: 1) DHL is able to provide many ports for transportation. 2) DHL also can

arrange flight for urgent claims immediately if it is essential. 3) DHL can deliver goods or

mails to anywhere customers claim to, but DHL is not responsible for tariff. It means

customers have to pay the tariff by themselves. 4) DHL owns high tech to ensure the safety of

delivery. To sum up, the cost of DHL makes the price of DHL become expensive.

DHL runs business via an accepted price all over the world. But there is an exception, China.

In the mainland of China, DHL is rather expensive due to tariffs.

4.5.1 DHL Air Freight

Air freight logistics has become an important factor in supply chain management, keeping up

the pace with the changing world market, and ensuring costly backlogs or shortages are kept

to a minimum. DHL Global Forwarding carrying 12% of the air freight worldwide market,

the air freight operations are managed through DHL private network that including 7,000

specialists in 600 offices from over 150 countries. According to Yunfeng Gao, DHL owns

exclusive airplanes (air bus A300, Boeing 757 mainly). The core air center is in Brussels,

Belgium. All air freight services are time-defined, and by working together with carefully

selected preferred carriers. However, although DHL has exclusive airplanes, but sometimes

these airplanes won’t be arranged to delivery DHL goods or mails.

26

In order to make customer feel comfortable and safe, DHL has implemented DHL Interactive

to give possibility to customers to track the shipping process. Regarding the cargo insurance,

DHL is well known for its insurance measure in the industry. For instance, DHL provides

insurance services that offer customer financial protection against the risk of physical loss or

damage, from almost any external cause. And furthermore, a global incident reporting room

and more than 100 highly secure locations spread widely to monitor freight security. With an

experienced global security team- Customs- Trade Partnership Against Terrorism (C-TPAT)

and a growing network of highly secured locations worldwide, DHL is able to handle any

customers supply chain security requirements(source: DHL air freight service).

4.5.2 DHL Ocean Freight

DHL Global Forwarding owns 330 ocean freight offices and has long term relationship with

carrier, so that DHL can offer customer flexible delivery and a competitive price. DHL’s

tracking & tracing system can work with its Information Management Systems to give full

visibility to customers along the whole supply chain. And thanks to the latest shipping tools

or technology, DHL can finish more specific tasks smoothly and completely. The use of new

equipment provides the possibility to reduce the delivery time and cost at the same time. By

deploying DHL Ocean Secure, the brand new ocean freight full container load program, the

security of delivery, real time spent and reliability can be improved. In addition, in recent

years the satellite networks, GPS also help the company become more reliable and efficient

(source: DHL ocean freight service).

4.5.3 DHL Road & Rail Freight

DHL raileurope offers a fast, reliable and environmentally friendly rail network to deliver all

major European business centres. DHL Freight sets a Competence Centre in Sweden and

terminals in Europe, it makes sure that the shipment could be delivered to wherever it needs

to be on right time. DHL RAILEUROPE means flexibility and safety in a sense, DHL’s

network provides high quality integrated service with terminal services, transport and IT

solutions. All types of rail equipment is available, quality control system guarantee the top-

level service from pick up to delivery and it will also ensure the environmental impact and try

to minimize it as possible as it can (source: DHL road and rail service).

“In order to ensure the safety of transportation, DHL rejects to deliver some ‘special goods’.

Such as: liquid; wood; and dangerous stuff etc.”

27

-------Yunfeng Gao

4.6 DHL Brand Associations

“Customers must be able to immediately recognize us wherever they see us.”

----DHL official website

Regarding the image of company, DHL is acknowledged within the global mail, express,

freight, forwarding and supply chain expertise. The brand awareness across regions and

nations has been increasing constantly. According to Sara, DHL is the No.1 in the industry in

the world. However, the biggest challenge is to defend this position and enable stay for a long

time as a leader. The DHL brand stands for DHL’s values and attitude. But Yunfeng Gao

heard some feedback from customers, some of people may reject DHL because of high price.

According to Sara, 73 % of the employees who responded said that they were generally

satisfied with their tasks in 2010. Overall, employees’ responses inspire changes that help

DHL become a more attractive employer. DHL also encourages its employees to enhance

themselves and provides many opportunities to let them study personally and professionally.

And as a result, due to DHL employee education system most employees are able to create

new ideas to their business, and contribute those ideas or their competencies to the success of

the company.

Key Performance Indicators (KPIs) is mainly used by DHL HR department. It is a

professional HR tool to estimate employee issues, including absences, health and

occupational safety, employee turnover, vocational training and further training for

employees, and employees’ ideas. Figure 7 shows the KPI index comparison which made by

annual Employee Opinion Survey (EOS) between 2009 and 2010. Basically, this survey help

DHL understand and know employee’s view so that company can determine and create

follow-up strategy.

The high values recorded for Customer Promise (77 %), Cooperation (74 %) and Working

Conditions (73 %) emphasize where DHL major strengths are to be found. The KPI also

indicates that 73 % of participants are generally satisfied with employee’s job. Additional,

Dirk indicates that more and more employees satisfy with their working condition. The

working environment makes employees feel comfortable. Nevertheless, EOS Follow-up

28

Measures (53 %) and Living First Choice (59 %) continue to indicate that there is a room for

improvement.

Figure 7Employee estimation by KPI (2010)

Source: Deutsche Post DHL official website-DHL employee.

Based on customer needs, the DHL workforce is diversity. DHL launches diversity strategy

which emphasize equality of opportunity, balancing work time with family life and

supporting woman’s careers generally. There is no prejudice or any kinds of discrimination

existing in DHL, each employee can get opportunity to develop his or her career without

barriers.

Figure 8 DHL Sickness rate

Source: Deutsche Post DHL official website-DHL health management.

29

“Health and safety at work” as the joint statement in DHL, it sets high standard of health and

safety for all workforce. According to figure 8, the sickness rate of DHL employee was 5.4%

in 2010. By comparing to 2009, the rate was decrease. DHL is trying to reduce the sickness

rate.Eeven though the progress is not obvious, DHL still wants to take care of its employee’s

health.

Yunfeng Gao told something about salary. In China, most of DHL employee think the salary

is ok, at least it is higher than competitors’. Further, sometimes they can get extra economic

compensation, such as: bonus, dividend, and overtime pay. Thus, DHL can provide a

comfortable life for its employee. However, it also depends on individual skills and

experiences.

30

5. Analysis

The results of empirical finding in section four and the theory discussed in section two are

combined and linked together, to find out the connection between them. The SWOT matrix

would be taken up to present the results of analysis in the end.

5.1 DHL customer analysis

DHL customer is everywhere, and anyone can be DHL’s customer if ther is something to

deliver. It also reflects the application of DHL, With a global network composed of more

than 220 countries and territories and 285,000 employees worldwide, cutomers can call DHL

for help anywhere. DHL segments it customer into different group, it helps manager

understand more about marketing and service innovation. Customer segmentation also

provide chance to offer specific services to customers based on theri needs.

DHL is trying to be the best all the time, what DHL expects is to solve problem before it

occurs. Regarding identification of motivation, the good brand reputation; safety insurance;

acceptable price make DHL become No. 1 in the industry and hleps to keep its dominant

position. Thus, by considering the leading position of industry, it is supposed to be the main

reason why people like to choose DHL instead of other brands.

Determining the relative importance of the motivations, according to Sara Arrhenius & DHL

official website, DHL is good at listening to customer. Moreover, DHL is proud of its short

delivery time, and safety issue etc. These factors attract more and more people become

DHL’s loyal customer. Besides, DHL customer satisfaction was very high in 2011, DHL

Express won customer service award for the best B2B customer service in Sweden. It

indicates that customer trust DHL. According to Bergman & Klefsjö (2010), credibility is

completed. Therefore, how well the service it is might be the most important factor customer

care about.

Generally, many companies and organizations pay a lot of attention on new customers.

Menwhile, thery care less about old customers. However, DHL is aware of the importance of

old customers. Those old customers have close relationship with company’s revenue, further

keeping old customers can build long-term business, and reduce costs to seek for new

customers. According to Yunfeng Gao, how to keep customer with company has become a

significant part of company’s business strategy.

31

Unfortunately, there is no information to indicate if DHL has any unmet needs, and authors

did not find it due to the site manager’s inability to provide us an interview. However, unmet

needs of DHL can be a topic in further study. By linking Aaker (2001) and Gerhardt (2002)’

theory, the Figure 9 summarizes the conclusion of determining customer motivations.

Figure 9 determining customer motivations

Source from authors own

The win-win situation is achieved gradually. By long term cooperation with customer or

another company, DHL has gained the No.1 in the industry. It also makes customer happy,

which means customer is glad to be with DHL in daily life. Without trust, this situation is

impossible to happen.

5.2 DHL competitor analysis

Gerhardt (2002) states that understanding competitor is a significant approach to win market

share. In terms of total number of employee, UPS has an absolute advantage. UPS can exploit

the rich human resource to accomplish more tasks than other three do. On the contrary, the

large number of workforce might increase the cost directly. And UPS was founded earliest,

which means it should have more working experience than other two companies. Regarding

verification of insurance, even though UPS and FedEx have complete liability insurance,

DHL still be No.1 in the industry. Thanks to the new security equipment and latest

technology, DHL gains customer satisfaction, even customer loyalty. However, DHL should

learn something from its competitors to become more perfect, perhaps it is an opportunity to

attract potential customer more or less.One typical example is liability insurance, otherwise

it must be a huge weakness for DHL.

In terms of service, UPS critical freight focuses on time-critical freight needs. The benefits of

critical freight are: expedited transportation can be arranged based on customer time-critical

freight shipment needs; it ensures real-time shipment tracking from pickup to delivery; and

Identification of Motivation

Good reputation

Safety insurance

Assessment of Motivation Imprtance

Nice service

Safety insurance

Unmet needs

Further study

32

develop customized solutions to meet special transportation. TNT is trusted by many

enterprises, because TNT establishs exclusive service for enterprise, such as ExpressShipper,

and ExpressManager. FedEx can design a special package for customer’s high-tech items, it

provides the safety of goods during delivery time. Such service can make customer happy

and enable shipping easier. Besides, according to Yunfeng Gao, DHL should pay more

attention on U.S and South America marketing. Because UPS and FedEx do better than DHL.

A significant trend or event, such as concern about the emergence of a new competitor, can

dramatically affect the evaluation of strategy options. DHL should be aware of it. Moreover,

a new technology, which can represent both a threat to an established firm and an opportunity

to a prospective competitor, can signal new business arenas. Therefore, it is very necessary

for DHL to make innovation about its service. Otherwise the leading position in the industry

would be lost sooner or later.

All four companies focus on environment impact through respective sustainability policy.

They do their upmost to reduce environmental negative impact, at the same time they make

significant contributions to the environmental sustainability in the industry. Regarding

subsidiaries of DHL, UPS and FedEx, the subsidiaries enable service be more efficient. It

also response to customer’s different needs in a sense.

In addition, according to Lieb (2005) emphasizes that 3PL relationships today have become

more collaborative. In authors own opinion, in order to achieve the mutual target, sometime

the cooperation between competitor is essential. For example, the different 3PL companies

can work together due to large procuement or something like that. These companies can

sharing knowledge, experience and skills during cooperation. Besides, no company can be

successful without a tough competitor.

5.3 DHL environment analysis

According to Deutsche Post DHL, GOGREEN program is a sustainable strategy of DHL, it

deals with any environmental issues friendly and harmoniously during service time. There is

no doubt that every company or organization concerning leave some impacts to environment

whatever is good or bad, especially CO2, but GOGREEN has ability to control negative

impact and reduce it in some way. As mentioned before, DHL owns a professional group-

DHL in-house Carbon Management team to manage the carbon credits, and besides the team

is monitored by third party verifier. DHL totally follows and tries to acheive GOGREEN

33

objectives so that transparency on environmental impact, with a focus on DHL’s carbon

footprint including subcontracted transportation is available.

Regarding the improvement of operational efficiency and decrease our environmental impact,

DHL environmental management systems (EMS) is used to deal with it. In order to reduce its

environmental impact, DHL is testing electric and other alternative vehicles as new

generation delivery tools which can lead to the repalcement of the traditional energy. By

deploying new technology or new resource, the environmental damage would be reduced

efficiently. DHL Supply Chain GOGREEN 2011 also indicates that collaboration with

leading automotive manufacturers has achieved great progress, particularly for fuel savings.

Therefore, generally the company would like to provide such sustainable approach or

GOGREEN to its customer, because it cannot only satisfy customer but also generate great

values to environment.

Awareness of the employees about environment is made by the training of DHL so that

employees put environmental goals into practice.The education is very vital to the company

itself even to the entire society, an appropriate training can give people a right guide of life.

DHL is doing a good job on environment friendly issue which means employee knowledge is

strengthened. It offers opportunity to its employees to learn how important the environment is

and how to protect it from pollution in DHL way.

It is necessary to consider if DHL has enough awareness or power to face sustainability

challenge. DHL is always trying to provide a best delivery solution to customers and

environment, sometimes it is difficult to balance them at a same time. However GOGREEN

can do it. Business customers can choose to send all or a selection of their international

express shipments as GOGREEN with competitive price. With the GOGREEN optional

service, all transport-related emissions of carbon dioxide would be offset through external

climate protection projects. Therefore, balancing sustainability efforts with customer

expectation can be achieved by DHL.

In terms of identifying an appropriate environmental target, according to Lieb & Lieb (2010),

it is very important as same as balancing sustainability efforts with customer expectation.

There is impossible to be success without an appropriate target. However, as a leader in the

industry and the first logistics company to establish carbon efficient target, DHL sets the aim

of a 10% efficiency increase by 2012. The efficiency will grow to 30% by 2020 in every

34

business area, including those DHL’s subcontractors. By implementing GOGREEN program,

it is obvious and reasonable to judge that DHL always pays a lot of attention on

environmental protection and sustainability issue. Basically these issues can get priority; it

means environmental protection would be concerned firstly. For instance, DHL continuously

strive to improve CO2 efficiency in its own networks and operations even DHL and its

customer have already got benefit by implementing GOGREEN. As one of biggest 3PL

companies, DHL always focus to reduce its environmental effect as little as possible. Unlike

many other Chinese domestic company, which seeks for economic compensation but ignore

environment problem (Koh, 2005).

DHL offers current and potential employees opportunities to develop professionally. It

provides knowledge or information of current environmental practices to increase employees’

environmental awareness. In this way DHL can increase sensitivity to sustainability and

reduce cost. Thus, the awareness and ideology of environment friendlyness is emphasized

throughout the entire DHL. It means that DHL is probably capable to deal with kinds of

environmental or ecological problem relating to business area（see Figure 10）.

Figure 10 DHL and sustainability challenges

Source from authors own

Identify an appropriate environment

al target

Balancing sustainabilit

y efforts with

customer expectation

Developing organizational sensitivity

to sustainabilit

y issues

Generating accurate company

information related to

environmental practice

Establishing sustainability priorites with the company

35

5.4 DHL quality of service

As a famous 3PL company in the world, the main product of DHL is delivery service.

Therefore different transportation tools are very important to DHL and its customers.

Generally, delivery service always links with some issues such as safety, environmental

impact, durability, and reliability. The customers are concerned and asked about these factors

frequently.

According to DHL official website, DHL owns diverse software and hardware to support that

identification, The hi-tech can be one of DHL strengths. Moreover, more than 7,000

specialists in the world are preparing for providing professional service to its customers.

Unlike many other freight insurers, DHL measures according to value, rather than weight or

package count. Therefore no matter in air, sea or on land, DHL is able to make sure the

security of goods and mails.

DHL tries to satisfy each customer’s demand or needs as best as it can. Thus safety and

durability which are two factors which custmers care about should be focused on mainly by

company. In order to let the whole delivery process be smooth without any accident

completely, every year the company invest billions of Euros to ensure the security of goods

and mails by new security equipment or latest technology. In addition, there is a easy way to

contact with DHL through DHL official webiste, and all the staffs are willing to help

customers. Then according to Bergman & Klefsjö (2010), the communication, responsiveness

and access can be achieved.

Even through DHL can offer best service to customer. But the biggest problem is about price.

The expensive price must cause customer loss. Additional, DHL should develop U.S and

South America marketing by improving staff’s skill, attitude, knowledge.

However, it is not available to find any information about DHL customer complaint, it is an

unknown area that will affect the outcome of strategic decisions. Thus, customer complaint

can be regarded as one strategic uncertainty. In order to control customer complaint, the

information collection is essential. According to Aaker (2001), the strategy-developing

scenarios can be made. For instance, DHL can establish a department to take charge of

complaint. In such way company can creat contingency plan to guard against disater, to

prevent customer disatisfaction.

36

In terms of the quality of service. DHL should keeo developing its assessment mechanism;

making research about customer satisfaction regualarly; being aware of the change of market.

5.5 DHL brand association

According to Sara Arrhenius and Dirk Klasen, DHL provides reliable, innovative service and

solution to its customers. According to Heding et al (2008), corporate identity is “an

assembly of visual, physical or behavioral cues representing the company, making it

immediately recognizable to consumers.” Thus“Customers must be able to immediately

recognize us wherever they see us” , it indicates that the logo of DHL is quite unique, which

means it catches people’s eyes at first sight and leave significant impression to people.

However, in a dynamic marketing it is hard to predict what would show up in further time,

the current challenge for DHL is to keep the leading position and continue attracting more

and more potential customers.

Moreover, the high price also leaves negative influence on DHL brand. In such dynamic

market, customers would prefer cheaper service which they afford to pay. If DHL can control

its cost with an accepted price, it can gain more benefits.

By linking the leading position in the industry and customer feedback, the image of company

is rather good from outside looking. According to Nadin & Williams (2012), employee can

affect on brand association as well. In 2010, 73 % of the employees who responded said that

they were generally satisfied with their tasks.

In terms of the system of organization which Yunfeng Gao mentioned before, it consists of

leadership, organzation structure and working system. According to Yunfeng Gao, he told

that his superior is good and charming. The working atmosphere usually depends on the way

leader uses, from our own opinion. The personality charm can always make people come

together. Regarding working system, every man needs time to adapt it at the beginning.

DHL’s working system is effective, but sometimes it is too strict. Perhaps a strict working

system is essential for such successful company. And DHL is made of four departments, each

department has respective vision, strategy and service. It is effectove to assign task and focus

on different target for each.

A good training program offers DHL employee opportunities to develop themselves, and

further encourages them to become more active to contribute their knowledge and skills to

the success of company. Key Performance Indicators (KPIs) is used to estimate employees’

37

absences, health and occupational safety, employee turnover, vocational training, etc. By

comparing the KPIs between 2009 and 2010, it is obvious that the credit of every single

factor is getting increase. For instance, working conditions is getting better, employees can

have all the materials they need in order to work well. The increase of customer promise

means an employee has ability to provide a high quality service or product to make customer

happy.It definitely makes a great contribution to DHL customer satisfaction. While the

cooperation is very important for a group, the credit of cooperation in 2010 (74%) is higher

than previous year (71%). It indicates that the importance of teamwork is realized by most

employees. However, it is not good enough for such an international large company. There is

still a lot of room for DHL to improve the cooperation between employees. Further, Yunfeng

Gao indicates that the service of DHL staff is not so good in U.S and South America. As a

suggestion, DHL should establish a benchmark or a target as well as environment efficiency

target to measure the spirit of team work. The trainning to staff is important, it teachs DHL

employee what should do and how they should act when doing business. And if it is

necessary the prize or reward can be given in order to encourage cooperation and individual

skills.

In terms of working conditions, DHL had done its best to provide a good working

environment to everyone according to Dirk, and it also achieves a progress from 67% to 73%.

But it is hard to satisfy every employee’s demand at once. Regarding physical environment,

increasing the inventory of working condition can make employees feel comfortable, such as

new furniture, bright office room, new computer etc. However regarding mental environment,

the regular communication between manager and employees can bring a good atmosphere to

office. Each employee is glad to work with each other. Moreoval, vacation and coffee break

can provide employees an opportunity to release stress.

Equality of opportunity, balancing work time with family life and supporting woman’s

careers generally are promoted in DHL. Honestly, this strategy is very successful because it

enables the working atmosphere be nice so that the working efficiency can be enhanced

indirectly. Furthermore the working atmosphere can tell whether a company or an

organization is sucessful or not. And according to DHL official website the welfare also

enables its employee work happily and healthily.

38

Regarding salary issue, according to Yunfeng Gao, DHL always gives employees benefits for

what they have done for DHL. Most of employees satisfy the salary. If the skill of someone

was strong, he or she would gain more and even get promotion.

5.6 SWOT analysis for DHL

By combining all the external and internal factors discussed above, SWOT matrix of DHL

(see Table 3) is made to show what strength, opportunities, weakness, and threats DHL has.

Table 3 SWOT matrix of DHL

Source from authors own

Strength- According to Berry (1999) company should concentrate on customer; build

long trust with its closed customer. DHL’s customers are everywhere. As a global

player, DHL is acting all over the world with understanding and respect for different

cultures. DHL always listen to its customers’ voice. In 2011 DHL Express won

customer service award for the best B2B customer service in Sweden. Further, DHL

provides short time delivery, safety insurance service with hi-tech equipment. It

brings customer satisfication and high efficiency. On the other hand, regarding

GOGREEN programme, all transport-related emissions of carbon dioxide would be

offset through external climate protection projects. Therefore, balancing sustainability

efforts with customer expectation can be achieved by DHL. DHL can satisfy most

employees with a good salary, it stimulates employees to work hard.

STRENGTH 1) customer satisfaction

2) hi-tech service

3)green performance

4) salary

WEAKNESSES

1) the total number of employees

2) liability insurance

3) price

4) attitude of staff

OPPORTUNITY

1) learn from competitors

2) cooperation improvement

3) innovation

THREATS

1) maintain the leading positin

2) tough competitors

Competitive

advantages Competitive

disadvantags

39

Weakness- DHL does not have employees as many as UPS. Which means UPS is able

to exploit its rich human resource to accomplish more tasks than DHL does.

Comparing to comparing with DHL’s competitor, DHL lacks liability insurance.

Probably it might cause customer loss someday. The most serious problem is price.

Indeed, DHL is more expensive than its competitors. And in some areas, the quality

of service is difficult to guarantee. Especially some staffs’ bad attitude would have

significant influence on company image.

Opportunities-Different companies have different exclusive strategies. Even the core

competency cannot be copied there is still a lot of things DHL can learn from other

companies. For instance, DHL can establish its own liability insurance by taking

example by its competitors’. In addition, regarding employee cooperation, Key

Performance Indicators (KPIs) state that the credit of cooperation in 2010 is 74%. It is

not enough for such large international company. In our opinion, DHL still has more

ability and possibility to improve cooperation between employees. Moverovall, DHL

must innovate its service to give cutomer more suprise.

Threats- The biggest challenge for DHL is to keep the leading position. And there are

many competitors are trying to catch up with DHL all the time, such as: FedEx, UPS

and so on. As Thakkar (2005) states， the relationships associated with 3PL are

typically more complex than any traditional logistics supplier relationships. Therefore,

the competitor can be friend of DHL one day. On the contrary, friend could also turn

to your competitor. It means that it is possible to feed competitor by working together

by sharing knowledge, skills, resource and etc.

The strength and opportunities would be regarded as company’s competitive advantages. For

instance, the competitive advantages of DHL are customer satisfaction, hi-tech transportation

service, good salary and sustainable program-GOGREEN. If DHL can study from other

companies or improve teamwork itwill be more successful.

On the other hand, weakness and threats would be discussed as competitive disadvantages.

DHL lacks complete liability insurance which might lead to customer loss, and weaken

safety issues. Besides, the total number of DHL employees is not enough to deal with global

business. More employee means an opportunity to provide more service to clients.

Meanwhile the workload of each employee can be reduced. So that excessive toil can be

prevented. Therefore, recruiting is a good option to solve such problem. Moreover, the cost of

40

DHL is higher. It makes potential customer far away from DHL. Besids, it is hard to control

the qualification of each employee, some of them might lack patience or experience to handle

trouble.

41

6. Conclusion

In this thesis, the authors present the empiric information of DHL. SWOT analysis is used for

analyzing external and internal factors of DHL. The strength and opportunities are regarded

as the company’s competitive advantages; on the other hand, weakness and threats are

discussed as competitive disadvantages.

RQ1: What competitive advantages does DHL gain from external and internal factors?

By analyzing external and internal factors, it is found that the competitive advantages of

DHL are related to customer satisfaction, hi-tech transportation service and sustainable

program-GOGREEN. The long-term relationship with customer brings win-win situation to

both parties, which means DHL makes customer feel safe and happy, meanwhile customer

gives opportunity to DHL to earn economic benefits. Hi-tech service seems to attract more

and more potential customers. And all transport-related emissions of carbon dioxide would be

reduced through DHL GOGREEN, it is an excellent green program to proetct environment.

Moreover, GOGREEN can be a typical demonstration for future generation, how we

minimize environment effect in 3PL indusrty. Besides, if DHL can learn something

complementary from other companies, or improve teamwork spirits it must be more another

important competitive advantage. The level of salary makes employees feel comfortable and

makes good staffs stay with DHL.

According to Yunfeng Gao, theoretically, 3PL industries own many advantages than

traditional industry, such as: skillful staffs, high-tech equipments, and complex distrbution

network. Consequently, these advantages make the cost low, improve efficiency, and high

level of service. Thus, the company would be more competitive .

RQ2: What competitive disadvantage does DHL have? And what DHL can learn from

analyzing competitive disadvantage?

DHL lacks complete liability insurance which might lead to customer loss. As a suggestion,

DHL should establish a complete liability insurance system as soon as possible. And, the

fewer employees might also cause efficiency problem, it could leave bad impact on

employees’ health because of a lot of jobs. Further recuritment may be another good option to

solve such problem. But the manager should also care about employees’ physical and mental

health more actively. Regarding price issue, DHL must deal with a cheaper brand identity as

42

soon as possible. DHL can make discount for customer to inspire sustainable business.

Providing more reward or honor to employee who act excellently may stimulate employee to

work hard. In such dynamic marketing environment, DHL should keep making surprise to its

customer and even to its competitor. DHL should invest more on R&D, and consummate

service in order to defend its leading position.

6.1 Implication

At the beginning of this thesis, the interviewee in DHL were unwilling to give answers of

some questions as they thought the questions were sensitive that they didn’t get approval of

the superior. In order to gather more information, authors make another effort to contact other

officer in DHL and finally were told to get relevant information through DHL website.

However, this study contributes to the companies which plan to develop their competition

from inside to outside in the market, especially in 3PL industry. Through the analysis of

external, internal and SWOT of DHL, authors provide the competitive advantages and

disadvantage that DHL has and summarize company’s strength, weakness, opportunity and

threats. Such analysis gives authors deep insights into company successful factors and

suggestions from dealing with the problems which company may encounter.

6.2 Further study

The unmet needs are the product or services that do not meet customer expectation, and it

means opportunities and threats for companies to improve the quality of their goods or

services. However, in this thesis there is no information to indicate if DHL has any unmet

needs, but it must be there. If DHL can enhance itself by providing unmet needs to customer,

there is no doubt DHL would be more competitive in the 3PL industry. Furthermore, unmet

needs have direct impact on customer satisfaction. Customer satisfaction is the most

important issue in the marketing, so it is worth to research DHL customer satisfaction by

analyzing unmet needs. In order to complete this reseach, the questionnaire about customer

satisfaction is essential, and it is necessary to look for relevant theories as guide. By linking

theories and the result of questionnaire, the unmet needs of DHLcan be found eventually.

43

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47

Appendix

Interview questionnaire for DHL

Introduction

Short description of DHL

DHL is a part of the Deutsche Post DHL group, one of the largest employers in the

world. With a global network composed of more than 220 countries and territories

and 470,000 employees worldwide. DHL also offers unparalleled expertise in express,

air and ocean freight, overland transport, contract logistics solutions as well as

international mail services.

----from DHL official website

What kind of business is DHL doing?

DHL provides innovative, reliable and successful services and solutions in

international express, air and ocean freight, road and rail transportation, contract

logistics and international mail to our customers.

----from Dirk Klasen

Explain how has DHL developed in recent years shortly

The integration of business in APAC and EEMEA district is one of the important initiates

in DHL recent years. New organizational structure is divided into three operating districts:

APAC and Eastern Europe, the Middle East and Africa district, Europe district and

48

America district. After this integration, DHL freight volume grew at an annual average of

16% in APAC EEMEA district and 4% in other districts.

----from Dirk Klasen & DHL official website

Customer analysis

How many customers does DHL have throughout the whole world?

It is hard to tell by an exact number. All I can tell our customers are everywhere on

earth.

----from Sara Arrhenius

How does DHL measure customer satisfaction? (by feedback from customer? Make

customer satisfaction research? Or other ways?)

DHL measures customer satisfaction in different ways and sometimes it even differs

between regions and countries. We measure how fast we pick up the phone, first time

resolution of customer query and customer satisfaction.

----from Sara Arrhenius

How does DHL deals with customers’ complaints?

DHL Express in Sweden has processes and KPI measure for how to handle

complaints. They should be dealt with within a specified timeframe and resolved

according to agreed timings.

----from Sara Arrhenius

Does DHL have long term relationship with its customers?

Yes. We want to be the first choice for our customers every time. Therefore, we

constantly strive to make our customers more successful - helping them grow and

49

realize their business aspirations. Further, we also conduct Global Customer Solution

for top 100 customers.

----from DHL official website

According to different customer needs, customers are segmented as: strategic

customer; long-term relationship customer; and normal customer.

--------Yunfeng Gao

What benefits or profits will DHL obtain from long term relationship with customers?

Our top customers also need the flexibility to pick and choose from a wide range of

supply chain options - such as express, air, ocean, freight and contract logistics.

DHL's Global Customer Solutions team continuously customizes innovative solutions

that meet its customers’ needs and move their business. We listen closely to our

customers and work with them to provide high quality solutions. Our customers'

success is our success.

----from Sara Arrhenius & DHL official website

Of course, the profit would be improved by long term relationship with customers.

-------Yunfeng Gao

Competitor analysis

What current and potential competitor does DHL have to face?

UPS, FedEx, TNT, all other logistics companies are competitors in different markets

and by different transportation modes, and competitors vary if in Europe, Asia, or

Americas.

----from Sara Arrhenius & Dirk Klasen

Is DHL aware of its competitors (competitor’s core competency, weakness, size,

strategy and so on)?

Does DHL make any comparison with its competitors?

50

Is the DHL’s service easy to substitute? Is it easy or difficult for another company to

imitate your service?

Every logistics company dose the same or similar job after all. But the core

competency is impossible to copy.

----from Sara Arrhenius & Dirk Klasen

Environment analysis

Does DHL leave any environmental impact during transportation or working time?

Of course DHL has. Waste, noise, the use of natural resources and local air pollution,

especially CO2.

----from Sara Arrhenius & DHL official website

How does DHL measure its environmental impact?

There are many instances where our impact on the environment, and the remedial

measures we take, are difficult to discern. So, as part of our commitment to operational

and service excellence, we have developed powerful tools to quantify carbon emissions.

Published on and offline, our Corporate Responsibility Report delivers full transparency,

providing verified evidence of our carbon output and validating the effect of our

efficiency measures. Besides, GOGREEN is a significant tool to calculate the CO2

emissions.

----from Sara Arrhenius & DHL official website

Does DHL own any unique strategies or approaches to minimize its environmental

impact？

Critical assessment of our extensive vehicle fleet is already generating positive results,

including collaboration with leading automotive manufacturers to realise significant fuel

savings. Together, by harnessing the benefits of aerodynamic design, we have created the

revolutionary Teardrop Trailer. Research and evaluation of alternative fuels, state-of-the-

art telematic systems and cutting-edge technologies, including hybrid and electric

vehicles, are backed by simple and immediate solutions including maximum speed

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reduction. Education also plays a vital role through advanced driver training,

incorporating dynamic vehicle control and efficient fuel management. And GOGREEN

program is the most vital strategy to minimize environmental impact.

---- DHL official website

Does DHL have any sustainable strategies to deal with the disruption of natural

resource?

Climate change is the most pressing challenge facing humanity. As part of the world’s

leading logistics group, Deutsche Post DHL, we are committed to taking corporate

responsibility for the environment seriously. Our GOGREEN program consolidates this

approach; ensuring sustainability is at the heart of everything we do.

Since the launch of GOGREEN we have proven that what is good for our environment

can be great for business too. For example, DHL Supply Chain’s partnership with Fujitsu

has achieved 45% carbon efficiency to date. Many of our UK retail partners are now also

enjoying the cost benefits of advanced aerodynamics, alternative fuels and hybrid

vehicles.

----from Dirk Klasen & DHL official website

Quality of service

How does DHL make sure the safety of goods during transportation?

As part of our efforts to establish a true security culture, DHL was the first global freight

forwarder with an in-house security department and one of the first to receive the

Customs Trade Partnership Against Terrorism (C-TPAT) certification from the US

Customs and Border Protection Agency. Several of our programs have achieved C-TPAT

‘Best Practice’ accreditation by US authorities. We manage freight security through a

global incident reporting room and more than 100 highly secure locations, more than the

entire forwarding and logistics industry. We also use state-of-the-art risk assessment to

ensure your assets are protected.

We have developed DHL Interactive to help streamline your shipping process. We will

provide increased shipment information to that seen online, which ensures that you

always have the greatest visibility of your freight from collection through to delivery.

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Shipment management benefits will be seen in both online booking and automatic route

optimization. DHL Interactive’s step by step approach makes certain that your

requirements are covered and that critical information is saved.

DHL is acknowledged within the industry for its insurance expertise. On top of the

standard industry liability, we provide insurance services that offer you financial

protection against the risk of physical loss or damage, from almost any external cause.

Every year we insure billions of Euros worth of cargo. This gives us tremendous buying

power and more favourable pricing than most shippers can command on their own. We

offer a broad range of insurance programs, including all-risk coverage for ocean, air,

ground, warehousing, and heavy industrial projects.

----from Sara Arrhenius & DHL official website

In order to provide best service to customer, the cost of DHL is higher. Consequently, it

increases the price of DHL. Because 1) DHL is able to provide many ports for transportation.

2) DHL also can arrange flight for urgent claims immediately if it is essential. 3) DHL can

deliver goods or mails to anywhere customers claim to, but DHL is not responsible for tariff.

It means customers have to pay the tariff by themselves. 4) DHL owns high tech to ensure the

safety of delivery.

-------Yunfeng Gao

Are there any protection strategies existing to prevent the damage of goods?

DHL is acknowledged within the industry for its insurance expertise. On top of the

standard industry liability, we provide insurance services that offer you financial

protection against the risk of physical loss or damage, from almost any external cause.

Unlike many freight insurers, we measure according to value, rather than weight or

package count. This gives you a more accurate valuation of your freight should

compensation be required.

----from DHL official website

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How often does problem occur which lead to reduce customer satisfaction?

I have no idea, but I am sure that customer likes the DHL satff’s attitude. It is very

nice. Expecially, as far as I know, in Asia, West Europe, the quality of service is

higher. But in South America and U.S, it is not as good as UPS or FedEx.

---------Yunfeng Gao

Brand association and others

How does DHL identify the image of company?

Today we are the world's No. 1 in our industry. Now our challenge is to stay in this

position. We have to ensure we deliver excellent performance at all concrete touch

points. Consistency is the name of the game.

----from Sara Arrhenius & DHL official website

What is company’s position in market?

As the global market leader in the 3PL industry, DHL provides innovative, reliable

and successful services and solutions in international express, air and ocean freight,

road and rail transportation, contract logistics and international mail to our customers.

----from Sara Arrhenius

Is there any possibility that the company’s core competency or knowledge spill over

outside the company?

I do not think so. Every employee should be responsible for proetcting company.

---- Dirk Klasen

Are the employees satisfied in DHL? How manager motivate its subordinate?

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In 2010, 73 % of the employees who responded said that they were generally satisfied

with their tasks. Employees’ responses inspire changes that help us become an even more

attractive employer.

We offer current and potential employees a diverse range of opportunities to develop

professionally and personally; we empower them to contribute their ideas and

competencies and influence the success of the company；we encourage them to be a part

of an organization that makes a contribution to society as well as to the postal and

logistics industries.

----from Sara Arrhenius & Dirk Klasen

Most of employees satisfy the salary. But it also depends on individual skills.

----------Yunfeng Gao

What strength, opportunity does DHL have?

We provide a wide-ranging service and product portfolio, integrated in a worldwide

network. We even connect countries where our competitors are unrepresented - a real

worldwide service. Our customers know that we are a truly global player, acting all over

the world with understanding and respect for different cultures. Whenever our customers

need us we provide the right solution, whatever the industry, wherever the market. They

appreciate the fact that we offer strong local presence based on a global network - just

around the corner from wherever they are, and in markets where they want to deliver. Our

customers enjoy the fact that we are close to their business and cover the complete

process for all their mail, express and logistics needs, from letters to large containers,

across all continents and countries.

----from Dirk Klasen

What weakness, threat does DHL have？

High cost. The price may be too expersive for some people.

-------Yunfeng Gao